The Mansion House speeches, delivered these days in sober black rather than the Edwardian elegance of the past, have been occasions for great monetary expositions.

Governor of the Bank of England Mark Carney did not disappoint.

His pronouncement that the long-debated interest rate rise ‘could come sooner than markets currently expect’ will have a more direct impact on sentiment than all the other measures in the Chancellor’s and governor’s speeches put together.

Change: What has caused Carney to harden his rhetoric from the rather bearish assessment he gave at the Inflation Report press conference a month or so ago?

Carney – following in the great tradition of his predecessor Lord (Mervyn) King – decided to go for a sporting metaphor to describe current economic conditions, adopting the humble canoe.

It is a craft that can navigate ‘the most rapid and treacherous waters’.

So what has caused Carney to harden his rhetoric from the rather bearish assessment he gave at the Inflation Report press conference a month or so ago?

There may still be spare capacity in the economy but latest data shows that growth has been much stronger and unemployment fallen far faster than anyone could have expected.

At home the impact has been seen in a runaway housing market which the Bank, with the approval of the Chancellor, intends to deal with through the Financial Policy Committee and direct action on loan-to-income and loan-to-value ratios.

Externally the sharp turnabout in the economy has seen the current account deficit at record levels, the trade deficit has widened and there has been a sharp fall away in overseas earnings.

So far the governor is not alarmed, but he is waving an amber flag.

As Carney insisted, ‘borrowing from abroad to consume at home is hardly a recipe for balanced growth’.

In fact it is the British disease that reaches right back to when we came off the gold standard in 1931 and the sterling crises of 1967, 1976 and 1992 when we bounced out of the exchange rate mechanism.

The governor’s basic message is that the public and the politicians need to prepare themselves for an early interest rate event, that could come as soon as this autumn.

If there is any comfort to come from this it is the promise that rises will be small and gradual and will not go very far.

That might look comforting but for people leveraged to the hilt, with mortgage debt at four or more times income, this may be time to reach for the life rafts. The canoe could capsize in the rapids.

Oil shock

When the Bank warned about geopolitical risks to recovery this week it is unlikely that the Old Lady had forseen a marauding mob of ISIS jihadists seizing control of large swathes of northern Iraq.

However, as a result of the crisis in Eastern Ukraine and the crumbling Shia government in Baghdad there are really serious reasons to worry about energy supplies.

The US may be far more oil independent than in the recent past, as a result of domestic fracking, but the Middle East plays a key role in its supplies and the US driving season – when Americans take to the roads for summer vacations – is approaching.

By the standards of these things the $2 upward shift in the Brent crude oil price to $111.85 a barrel may be regarded as modest.

But what if the government in Baghdad, the gateway to the southern Iraq oilfields, where BP is among the biggest players, were to implode?

That really would wake the Western democracies out of their stupor. At one and the same time they would be faced with being held hostage by Russia for gas supplies, and an unrecognised Caliphate, stretching from Syria down to southern Iraq. Putting aside strategic options, such as a bear-hug for Iran, there are good reasons to be cautious.

Much of the great inflation of the last three decades of the 20th century came in the wake of conflict in the region, from the Yom Kippur war through to the first Gulf War, triggered when Saddam Hussein marched into Kuwait.

Oil prices act as a tax on growth for both consumers and businesses. With the eurozone struggling with stagnation and Asia nervous, as China adjusts its economic policy, confidence is fragile.

It wouldn’t take much of a jolt in the oil price to provoke a global shock.

Poor show

How nice that B&M, a successor to Woolworth on the nation’s high streets, is heading for the FTSE100 after a strong market reception that has turned its Indian founders, the Arora family, into instant billionaires.

Pity that the prospectus was first issued in the tax-friendly Luxembourg domicile rather than in the country where B&M does most business.